Why tethering plans don't make any sense

This guest article was submitted by Ben L.

Internet_tethering Cellular carriers try to make a dime off of their customers wherever they can. With all the hidden fees and overage charges, it would seem that their goal is to suck every penny from every customer they have.

What might be more ridiculous, though, is that consumers actually stand for it . . . even when the cell companies find ways to make us pay more for the same product.

Our subject for this discussion is cellular tethering plans. Tethering is a very simple concept. You own a cell phone that can browse the web through data channels provided by the carrier. By connecting your cell phone to a computer via Bluetooth or USB, you can share your phone’s internet connection with and browse the web on the computer. Simple, right? Of course.

So why is it that many carriers require "tethering plans" that cost more than the data package a web-capable phone user is already paying for? I’ve searched and searched but have never been able to find an adequate answer to this question.

Let’s take a look at an example:

The iPhone 3GS on AT&T's network in the United States is equipped with HSDPA 3G, which is capable of providing up to 3.6Mbit/s of downlink data access. Users have to pay $30/month for the iPhone 3G data plan. The iPhone OS 3.0 update has recently added support for tethering; AT&T hasn't yet enabled the functionality, but how much extra will it cost when they do? If we allow history to be our teacher today, we can make some assumptions based on the already existing Blackberry tethering plans. According to this chart, it costs $45/month for unlimited data usage on a Blackberry. However, tethering isn’t included with that package. For that "feature," customers have to pay $60/month for unlimited data plus the "tethering add-on."

But what product are you actually getting for that additional hard-earned cash? As far as I can tell, none. If you tether an iPhone 3GS to a computer, do you know how quickly you could consume data? 3.6Mbit/s, just the same as if you were using the phone untethered. You really aren’t getting anything extra for the added cost.

Imagine this: You pay a cable TV provider $20 a month for cable television. That $20 buys you whatever comes down that cable and you can plug it into whichever TV you want. If you normally watch TV on a 15” screen but want to plug it into a new 30” one day, should you have to pay more? Of course not! That would be absurd, and you certainly don’t have to call your cable provider to get permission to switch TVs. In the wild world of cellular data packages, however, paying for a tethering plan is like paying to plug your cable into a bigger TV.

You could easily consume the same amount of data directly on your iPhone 3GS as you would if it were tethered to a computer. So where is the justification for paying more for the functionality?

If you ask me, the cellular provider doesn’t even have a part in the process. Connecting an iPhone to a computer via Bluetooth, for example, is handled completely by the devices themselves with no interaction from the carrier; sending data from the iPhone to a computer has nothing to do with the carrier either. To clarify, you can connect your iPhone to an existing Wi-Fi hotspot and send that data via Bluetooth to a computer that doesn’t have built-in Wi-Fi. This demonstrates that tethering doesn’t have anything to do with the carrier, as the process itself is not dependent on where the data comes from (Wi-Fi or 3G).

All of this is in the face of the upcoming announcement of AT&T's iPhone tethering plans. There have been rumors that the plan could cost $55 in addition to the $30 fee that users already pay. AT&T has called this $55 rumor "false," but that doesn't mean they won't be charging an extra fee; all it means is that they won't be charging $55 extra! So if we base our guesstimates on the existing Blackberry tethering plan instead, users would still be expected to pay twice as much as what they're paying now (up to $60/month) just for the option of sharing the connection with a computer, a process that is already built into the device and handled entirely without AT&T's participation.

Can someone please tell me why we stand to pay something for nothing?

Ben L. has had an interest in all fields of technology for many years. His fascination with mobile technology started back in the days of the PDA; he has watched and blogged as the UMPC, netbook, and MID began to dominate the mobile technology world and continues to wonder where mobile tech will take us next.

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Guest Contributor

Pocketables is a US-based online tech magazine that brings news, insights, opinions, and comprehensive reviews on various mobile computing devices, portable technology, and related topics to a global audience. We focus on devices that fit into pockets of all sizes, from jeans and jackets to backpacks and purses. The gadget experts that comprise our staff produce high quality articles and original features colored with real-life use of products over weeks and months, not first-impression opinions formed within hours or days.